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Will Bitcoin become a legitimate currency for large companies?

John Brandon | July 8, 2015
While you still can’t use the infamous – and misunderstood – digital currency to pay for goods at your local big box outlet, Bitcoin use for real goods and services is growing…fast.

Connie Lin Chung, the senior product manager at Expedia, told CIO.com that adding the payment format went incredibly smooth. They use CoinBase to handle the conversion from BTC to U.S. dollars. At checkout, Expedia users are temporarily redirected to the Coinbase site to add their account information if they want to pay with BTC. 

"One of the things that matters a lot for executives was what type of risks we were taking by taking bitcoin. But we really aren't because we convert it straight to USD right after the transaction," says Lin Chung from Expedia, Inc. "There was a segment of people who were really interested in paying with Bitcoin, so we wanted to offer that to our customers."

How the blockchain helps 

Blockchain technology is also helping making BTC more legitimate for larger companies. Judd Bagley, a spokesman for Overstock.com who works closely with the internal Bitcoin development team, says blockchain tech is a key reason why they accept the payment method.

"The blockchain is very good at removing the need for intermediaries whose purpose is to bridge the transactional trust gap that exists between individuals who wish to do business without already having a trust-based relationship," he says. "These intermediaries don't work for free. They come at a cost of time and money. However, with the blockchain, you don't have to trust the counterparty on the deal. You only have to trust math and the principles of cryptography." 

The real benefit of using the blockchain for any large company is that it solves some of the regulatory issues and helps companies scale out as the transaction levels grow. 

"Our technology can fit easily into existing business systems. We see this blockchain as a service model growing rapidly because a few simple API calls can give your accounting or document system a blockchain back end," says Peter Kirby, the president of Factom, a company that creates a secure time-stamp of data used for transactions. 

Not picture perfect yet 

Of course, we're still a long way from walking into a Best Buy store and paying with Bitcoin from your smartphone, and that's mostly due to customer perception and adoption trends. Many consumers have a hard time even understanding Bitcoin or the blockchain. Indeed, when CIO.com contacted two major retail giants, Amazon and CVS, both companies said they had not announced any plans to accept the alternative payment method. To date, no mainstream brick-and-mortar retailer has started accepting the currency, although you can use an app like Gyft to purchase a gift card using Bitcoin for major retailers. 

"We are starting to see many POS systems accepting bitcoin from gas stations to gaming machines," says Forzley from Align Commerce. "It is absolutely feasible to see it offered as a payment option in brick and mortar retailers in the not so distant future." 

 

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